Federal Stimulus in Response to COVID-19

by Andrew D. McCarthy

On Wednesday, March 25, the Senate and the White House reached a deal regarding a $2 trillion coronavirus economic stimulus package.

The Senate plans to vote on the legislation on March 25.  Then the House will need to pass it before it goes to the President to sign it into law.  For the House to pass it quickly on Wednesday, the vote would need to happen by a voice vote without any objections from any member of the House, otherwise the legislators will need to return to D.C. for a vote.  The House reconvenes on Thursday, March 26.

The text of the legislation has not been released.  Although details on the provisions are scant, sources indicate the legislation contains the following:

  • $500 billion for loans and assistance to companies, including $50 billion for loans to airlines and state and local governments
  • $350 billion in aid to small businesses, mostly in the form of loans through the Small Business Administration and banks; such loans used for payroll, mortgage, and rent expenses will be eligible for forgiveness
  • Direct payments to individuals in the amount of $1,200 for each adult, and $500 for each child under age 17 (subject to phase outs starting at the following amounts for the following types of taxpayers based on 2019 adjusted gross income (AGI): individuals with AGI of $75,000, couples filing jointly with AGI of $150,000, and heads of household with AGI of $112,500)
  • Unemployment insurance expanded to provide $600 per week for four months in addition to state benefits, and expanded eligibility to benefit more workers
  • Treasury oversight over who gets money and how they use it
  • Limits on companies receiving aid: prohibited stock buybacks during the term of the loan and the following year, limits on executive bonuses, required measures to protect workers
  • Required disclosure by Treasury Department regarding terms of loans or other aid to companies
  • Prohibitions on companies receiving aid where such companies are owned by certain politicians or government officials
  • $100 billion directly to hospitals and health care providers, $250 million in hospital grants, and payments for vaccines and test kits

We will be tracking these developments and providing updates.